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UPDATE 2-Spain's Repsol bows to shareholder pressure, adds CEO role
April 30, 2014 / 9:47 PM / in 4 years

UPDATE 2-Spain's Repsol bows to shareholder pressure, adds CEO role

* Brufau names former politician Imaz

* Finance director, strategy still decided by Brufau

* Pemex voted against appointment

* Move may pave way for succession (Adds background, quotes, Pemex vote)

By Carlos Ruano and Andrés González

MADRID, April 30 (Reuters) - Spanish energy group Repsol , under pressure from shareholders to improve corporate governance, on Wednesday created a new role of chief executive officer to take over day-to-day management duties from Chairman Antonio Brufau.

Josu Jon Imaz, a well-known former politician from the northern Basque region who joined Repsol in 2008, will become CEO.

Brufau, who has served as executive chairman of Repsol for nearly a decade, will remain as chairman in a nonexecutive capacity, Repsol said.

The group’s finance director will continue to report to the chairman, who will also remain in charge of strategy, according to a chart published by the company.

The changes appear to leave open the possibility of an ordered succession, although it may take place less quickly than shareholder Pemex, a vocal critic of Brufau, would like.

The Mexican state oil firm has publicly locked horns with Brufau over his handling of negotiations after the seizure of YPF, a former unit of Repsol, by Argentina in 2012, which ended in a $5 billion settlement.

“Following the financial compensation agreement with Argentina, the company has the optimum structure to generate new growth opportunities,” Repsol said in a statement.

The new structure comes after pressure from Pemex, Repsol’s third-largest shareholder with a 9.3 percent stake, which has expressed discontent with Brufau’s leadership generally and has asked on several occasions for a deputy to be named at the group.

A source close to Pemex said the oil company had voted against the naming of Imaz.

Sacyr, another major shareholder in Repsol, has also clashed with the 66-year-old chairman over strategy, although its position recently appears to be more muted.

The YPF spat not only caused tension between the biggest shareholders but also led to political negotiations between Spain, Argentina and Mexico.

By naming Imaz, Brufau will be able to draw on his political experience to resolve thorny cross-border issues.

Mexican President Enrique Pena Nieto will visit Spain in the coming months, practically coinciding with Brufau’s 10-year anniversary leading Repsol.

Imaz, at Repsol since 2008, is a 50-year-old chemist who ran its industrial division and up to now had been a member of the management committee but not a board member.

Several foreign investors have demanded that Spain improve corporate governance at listed companies as a condition for investment.

Power in Spanish companies concentrated in the hands of executive chairmen as the country slowly embraced stock market culture in the 1980s and 1990s after a long dictatorship finally ended in the 1970s.

Top companies such as Santander only named executive officers and operating officers relatively recently, but in spite of that strategy decisions have remained very firmly in the hands of chairmen. (Writing by Elisabeth O‘Leary; Editing by Julien Toyer, Pravin Char and Prudence Crowther)

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